Lido Finance dominates Liquid Staking: TVL over $30 billion

By KMatt | Blogging Crypto | 28 Feb 2024

Lido Finance is the leading dApp for Ethereum liquid staking and has recently surpassed a new milestone, 30 billion dollars (yesterday approximately 31.7 billion).

According to research conducted by The Block and published on February 26, Lido recorded a TVL of over 30 billion dollars, positioning itself as the dApp with the highest value of blocked capital ever.

Lido dominates the competition

Its popularity alone represents 63% of all funds locked on Ethereum for liquid staking, outclassing the veteran MakerDAO which ranks second with a market share of 17.8%, followed by Eigenlayer in third place.

The Lido protocol is now an institution in the context of decentralized finance, the largest validator on the Ethereum PoS blockchain, controlling 36 different operators who run nodes and manage the delicate block production phase within the most famous smart contract blockchain in the world. world (Prysm Team, P2P.ORG, Blockscape etc...).

Controlling 32% of all ETH staking, concerns arise about the centralization of power in the hands of a single entity, which could lead to less security, less censorship, and less decentralization.
To counter this trend, Rocket Pool, Stader Labs, Diva Staking and Puffer Finance had discussed the possibility of a pact in the summer of 2023 that limits each individual's market share to 22%.
A historic moment, perhaps one of the first occasions in which a group of dApps establish a hard cap for their TVL, but which did not arouse any fear in Lido which continued on its path.
In fact, again in the summer of 2023 on Lido the problem was discussed and a vote was taken to establish whether to introduce thresholds to limit the power of the protocol: 99.81% of the holders of the LDO token expressed their opinion not to impose this limit.
Eigenlayer found a good alternative, i.e. retaking (reusing the consensus offered by Ethereum with the previously blocked ETH). The idea attracted a lot of capital, contributing to the decentralization of network sequencers and therefore also overall to the decentralization of Ethereum.
With several options on the table for restaging with this protocol and with the need to find higher yields or farm airdrops as much as possible, Lido does not act as the only solution on the market but integrates with the rest of the emerging protocols that are slowly differentiating and decentralizing the different network operators.


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